U.S. DELAY TO COST CITY TAX CREDITS

John McCarron, Urban affairs writerCHICAGO TRIBUNE

Federal housing officials on Friday notified the prospective buyers of a low-income apartment complex in Uptown that the government needs more time to evaluate the proposal, and it cannot help the buyers meet a Jan. 1 deadline.

As a result, the City of Chicago, which stood ready to sponsor the purchase, will lose $700,000 worth of low-income housing tax credits that will expire, unused, at midnight Sunday.

''We`re very disappointed,'' said Anthony Fusco, whose Chicago Community Development Corporation had been trying for months to buy the 231-unit building at 850 W. Eastwood Ave.

''There`s no rational explanation for this,'' said Fusco, who vowed to keep trying to buy the building even though he`ll have to reapply for 1990 tax credits and seek another purchase option with the seller.

In his letter to Fusco, James Logue, deputy assistant secretary for multifamily housing at the U.S. Department of Housing and Urban Development, said his office didn`t have enough time to properly evaluate the deal by year`s end.

''The department could not prudently grant preliminary approval before all reviews are completed,'' Logue wrote. ''Your plan of action was submitted too late in the calendar year.''

The city forwarded the proposal to HUD on Nov. 15.

Michael Schubert, the city`s commissioner of housing, expressed frustration at losing the tax credits-10 percent of the city`s 1989 allotment- but said his department would continue to work with Fusco and HUD to consummate the deal in 1990.

HUD could foreclose on the 20-year-old building at any time because the original developer has missed numerous payments on a federally-insured mortgage loan.

Fusco`s company asked HUD not to foreclose, but instead to assign the mortgage to his firm. They would buy out the former owner, bring payments up to date and begin making badly needed repairs. Money for the deal was to be raised by selling federal income tax credits to a syndicate of investors. Fusco also wanted HUD to grant rent subsidies to about half the building`s tenants.

The plan had the backing of a community group called Organization of the NorthEast, and of a tenants` cooperative that wanted to manage the building.

Community leaders said the plan would have saved the government money.